Japan Raids Companies, Suspecting Bid Rigging

By ANDREW POLLACK,

Published: September 7, 1994

TOKYO, Sept. 6—
The Japanese Fair Trade Commission raided the offices of more than 20 prominent trading companies today on suspicion that they colluded on bids to supply material and equipment for the country's foreign aid program, news reports and officials here said.

The suspicions about bid-rigging come at a time when the United States Government has announced its intention to help American companies secure more contracts stemming from Japan's foreign aid expenditures, which total more than $10 billion a year.

There have long been assertions that the money Japan gives to less- developed countries as aid is used to buy Japanese equipment and services, to the exclusion of products and services from other nations. Tokyo has denied this, saying companies from all nations can bid for such contracts.

If the trading companies are charged with bid-rigging, it would raise new doubts about the awarding of contracts under Japan's official development assistance program.

In the last few years, the Japanese have seen many cases of bid-rigging on public works projects. The cases have led to arrests and resignations of politicians and construction-industry officials and have helped the United States in its push to open Japan's construction market.

Spokesmen for Mitsubishi and Itochu confirmed that their companies had been visited by officials from the Fair Trade Commission, the antitrust agency. At Mitsubishi, the agents went to the machinery division, which coordinates foreign-aid project bidding and some other offices. At Itochu, the agents visited the textile division and other offices.

But the spokesmen said they would have no further comment because they did not know exactly what the agency was seeking. A Fair Trade Commission official said the agency did not comment on investigations.

Robert M. Orr Jr., chairman of a committee dealing with Japan's foreign aid at the American Chamber of Commerce in Japan, said Tokyo's practice used to be to parcel out foreign aid grants to Japanese companies. But he said that had changed.